June 23, 2011
JLN Interest Rates - http://www.jlninterestrates.com
Conversation Starters
--CBO: Federal Debt Held By The Public Could Grow From Estimated 69 Percent Of GDP This Year To 84 Percent By 2035
The Congressional Budget Office (CBO) this week released the latest in its series of reports on the long-term budget outlook. CBO projects federal debt will grow from an estimated 69 percent of gross domestic product (GDP) this year to 84 percent by 2035. CBO says that as the economy continues to recover and the policies adopted to counteract the recession phase out, budget deficits will probably decline markedly in the next few years; but with the aging of the population and growing health care costs, the budget outlook, for both the coming decade and beyond, is daunting.
The retirement of the baby-boom generation is a key factor in the nation’s long-term fiscal outlook. It portends a significant and sustained increase in the share of the population receiving benefits from Social Security, Medicare, and Medicaid. Moreover, under current law, per capita spending for health care is likely to continue rising faster than spending per person on other goods and services.
CBO presents the long-term budget outlook under two scenarios that embody different assumptions about future policies governing federal revenues and spending:
* The extended-baseline scenario adheres closely to current law, following CBO’s 10-year baseline budget projections through 2021 and then extending the baseline concept for the rest of the long-term projection period. Under that scenario, revenues would reach 23 percent of GDP by 2035—much higher than has typically been seen in recent decades—and larger percentages thereafter. Nevertheless, annual spending would be greater, and federal debt held by the public would grow from an estimated 69 percent of GDP this year to 84 percent by 2035. (At the end of 2008, that debt was equal to 40 percent of GDP.)
* The alternative fiscal scenario incorporates several changes to current law that are widely expected to occur or that would modify some provisions that might be difficult to sustain for a long period. Under that scenario, which many budget analysts believe is a more realistic picture of the nation’s underlying fiscal policies, revenues would remain close to their historical average of 18 percent of GDP, and federal debt would exceed 100 percent of GDP by 2021 and would balloon to nearly 190 percent by 2035.
See the CBO's entire report here.
--Federal Reserve Bank of San Francisco: A Model-Independent Maximum Range for the Liquidity Correction of TIPS Yields
We derive a model-independent maximum range for the admissible liquidity risk premium in real Treasury bonds—also known as Treasury Inflation Protected Securities (TIPS). The range is constructed using additional information in the inflation swap market and a set of simple theoretical assumptions. As an application, we construct a lower bound to estimates of the inflation risk premium the Treasury receives from TIPS by deducting their maximum liquidity premium.
http://jlne.ws/jWMW31
--Christine Nielsen
Lead Stories
EU Stress Tests Updated for Worsening Sovereign Debt Situation
San Francisco Chronicle
The European Banking Authority has updated its bank stress tests to take more account of potential losses caused by banks' holdings of sovereign debt from crisis- hit European Union countries including Greece.
http://jlne.ws/mUrzK8
Greece seals deal with EU, IMF on austerity plan: sources
Reuters
Greece has won the consent of a team of EU-IMF inspectors for its new five-year austerity plan on Thursday after committing to an additional round of tax rises and spending cuts, sources with knowledge of the talks said.
http://jlne.ws/lk262n
Sovereign defaults and GDP: To default, or not to default?
The Economist
IN THEORY, fears about the economic damage wrought by a sovereign default should play a big role in disciplining countries considering repudiating their debts. But while countries that default do find themselves locked out of markets for some time, any growth penalty from a default tends to be short-lived. Argentina saw its GDP decline by 10.9% in the year after its December 2001 default.
http://jlne.ws/iQjNKN
Former Treasury Secretary And Chief Economic Adviser to President Obama, Larry Summers, Joins Square Board
Finextra
Larry Summers, former Treasury secretary and chief economic adviser to President Obama, has joined the board of mobile payments outfit Square.
http://jlne.ws/kYeAdX
Final rule increasing the threshold for exempt consumer credit transactions to $51,800
The Dodd-Frank Act requires that the threshold for exempt consumer credit transactions be adjusted annually by any annual percentage increase in the Consumer Price Index. Accordingly, based on the annual percentage increase as of June 1, 2011, the Board is adjusting the exemption threshold from $50,000 to $51,800, effective January 1, 2012.
http://jlne.ws/kmAQrB
Derivatives Cloud the Possible Fallout From a Greek Default
International Herald Tribune
Regulators worry that derivatives that insure against a default may have dangerously concentrated the risks.
http://jlne.ws/jDcExY
Gensler Says Suits Over Derivatives May Occur
Vipal Monga - WSJ
Gary Gensler, Chairman of the Commodity Futures Trading Commission, declined to offer any guarantees that derivatives deals won’t end up in court as a result of confusion over new rules, some of which are slated to go into effect in July and others at the end of the year.
http://jlne.ws/jT3dVR
Warning on bank rules reform
By Tom Braithwaite in Washington, Financial Times
John Walsh, a top US bank regulator, warned his colleagues against imposing tougher regulations on financial groups, drawing a furious reaction from a Democratic senator who called for him to be replaced. Calling existing capital levels “extraordinarily high” and proposing a “fundamental rethink” of international liquidity standards, Mr Walsh, acting comptroller of the currency, said: “My view is that we are in danger of trying to squeeze too much risk and complexity out of banking as we institute reforms to address problems and abuses stemming from the last crisis.”
http://jlne.ws/jaI9oQ
Feds Sue Bankers Over Fall in Bonds
BY LIZ RAPPAPORT AND RUTH SIMON, WSJ.com
Federal regulators accused J.P. Morgan Chase & Co. and Royal Bank of Scotland Group PLC of duping five large credit unions into buying more than $3 billion in mortgage bonds that were "destined to perform poorly," and that quickly sank the credit unions.
http://jlne.ws/kpJbjR
Fitch report says U.S. money fund exposure to European banks remains significant
http://jlne.ws/mSH8jA
Oversight Group Did Not Refer Housing Complaints
By GRETCHEN MORGENSON, NY Times
The federal agency overseeing Fannie Mae and Freddie Mac, the taxpayer-owned mortgage finance giants, failed to refer to criminal investigators and other authorities almost 100 complaints about possible foreclosure abuse and mortgage fraud at the companies over a recent two-year period, according to a report issued late Tuesday by the inspector general of the Federal Housing Finance Agency.
http://jlne.ws/lvRtYd
Geithner Confident U.S. Will Avoid Default Crisis
BY JEFFREY SPARSHOTT, WSJ.com
Treasury Secretary Timothy Geithner Tuesday said he is confident that the U.S. will avoid a default crisis this summer as policy makers near agreement on a broad budget framework.
http://jlne.ws/mEZlZt
Dodd-Frank claims niche form of gold trading
By Claudia Assis, MarketWatch
A little -known form of gold investing used by some retail currency traders is disappearing, ahead of tighter regulations scheduled to go into effect next month. Forex.com, a large retail foreign-exchange operation, on Friday told clients it will discontinue its gold and silver over-the-counter products marketed to retail investors who are U.S. residents. It asked investors to close their positions by July 15.
http://jlne.ws/jQ9fj4
J.P. Morgan to Pay $153.6 Million to Settle SEC Charges of Misleading Investors in CDO Tied to U.S.
Housing Market
Financial Times
Washington, D.C., June 21, 2011 – The Securities and Exchange Commission today announced that J.P. Morgan Securities LLC will pay $153.6 million to settle SEC charges that it misled investors in a complex mortgage securities transaction just as the housing market was starting to plummet. Under the settlement, harmed investors will receive all of their money back.
http://jlne.ws/liDHmn
Spain can't let up on reforms, IMF says
By Steve Goldstein, MarketWatch
The International Monetary Fund said Spain can't "let up on the reform momentum" after cutting its deficit to GDP to a level of 9.2% last year from 11.1% in 2009.
http://jlne.ws/mw2N1X
Saving the IMF for the world
Financial Times
No one foresaw the manner and suddenness of Dominique Strauss-Kahn’s departure from the helm of the International Monetary Fund. Thankfully, the transition to a new leadership has so far been less disruptive than one might have feared. By the end of the month, the next managing director will have been appointed. He or she – almost certainly she – will have to steer the IMF through big transformations, starting with the recruitment process itself.
http://jlne.ws/m01doN
Gross Says Equity Risk Premium Seems `Fairly Wide Now' - Video
http://jlne.ws/if0oKM
Bill Gross Gets the College Crisis Wrong
CNBC
Bill Gross joined the chorus of college skeptics today. "A mind is a precious thing to waste, so why are millions of America’s students wasting theirs by going to college?" he writes in his latest investment letter.
http://jlne.ws/kbJFzu
Government Must Do More to Create Jobs: Gross
Bloomberg
Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., said the U.S. government must do more to support
employment growth.
http://jlne.ws/lTSk4g
Awww. Barney Frank Hearts Sheila Bair
Wall Street Journal Blogs
Hearings of the House Financial Services Committee typically are scenes for red-faced speeches from members of Congress. Today, though, the House became a love fest for FDIC Chairman Sheila Bair.
http://jlne.ws/lJKac1
US derivs proposals slammed by ISDA
GFS News
US derivatives proposals are too stringent and will result in an unlevel playing field for the country's firms, the new chairman of the International Swaps and Derivatives Association has told lawmakers.
http://jlne.ws/ml61ec
Greece replaces finance minister
By Kerin Hope in Athens, Financial Times
George Papandreou, prime minister of Greece, has replaced his finance minister in a broad cabinet reshuffle to counter widespread anger over tough new austerity measures essential to prevent Greece from a disastrous default.
http://jlne.ws/krWGSQ
[Video] Goldman Sachs's O'Neill on Greek Debt Contagion
Bloomberg
Jim O'Neill, chairman of Goldman Sachs Asset Management, discusses the risk of contagion from the Greek debt crisis. He speaks with Bloomberg's Ryan Chilcote on the sidelines of the St. Petersburg International Economic Forum.
http://jlne.ws/m9PkgH
Henes: Are We Watching the Sequel to "Too Big to Fail?" Will Greece End Differently Than Lehman?
CNBC
A friend of mine who runs a hedge fund likes to say, "I have seen this movie before, and I know how it ends...badly." With respect to Greece, ironically, not only can we metaphorically say we've seen this movie before, but, in many ways, we have actually seen it - at least a movie of the same genre.
http://jlne.ws/kLG4rC
Greek crisis threatens European decade of economic implosion
Mohamed El-Erian, Financial Times
From day one, immense challenges faced the coalition of international institutions that opted for a liquidity approach to address Greece’s debt solvency problems. Now that this coalition is stumbling and bickering publicly, the outlook for Greece has taken a significant turn for the worse. Even as George Papandreou, the Greek prime minister, prepares to reshuffle his cabinet, he must know his nation’s predicament is now extremely hard to reverse.
http://jlne.ws/lHp9cx
[Video] Could this laptop hold Goldman's secrets?
http://jlne.ws/iEqD4C
U.S. tax crackdown hits Canadian residents
The Globe And Mail
A tax crackdown by the United States has sent more than one million Americans and green-card holders living in Canada scrambling to figure out how to comply.
http://jlne.ws/mKokK7
EU debt crisis threat to Canadian economy
By TARA PERKINS, The Globe And Mail
The sovereign debt situation in Europe could pose a threat to the economy in Canada and those elsewhere, Finance Minister Jim Flaherty suggested Monday.
http://jlne.ws/j3hPkZ
SEC Could File Civil Fraud Charges Against Some Raters
Reuters
U.S. regulators could file civil fraud charges against some credit-rating agencies for their role in developing mortgage-bond deals that helped bring about the financial crisis, the Wall Street Journal reported, citing people familiar with the matter.
http://jlne.ws/jGLVUQ
FOMC Post Mortum
[Video] Second Post-FOMC Press Conference, June 22, 2011
http://jlne.ws/jWgIsq
Fed Trims Forecasts for Economic Growth
By Tom Barkley and Michael R. Crittenden, WSJ.com
Federal Reserve officials Wednesday lowered their forecasts for economic growth and predicted underlying inflation would come in higher than thought this year, as the central bank’s policy-setting committee cautioned that the recovery is experiencing what is likely a temporary loss in momentum.
http://jlne.ws/iIqjod
FOMC Statement: Release Date: June 22, 2011
Information received since the Federal Open Market Committee met in April indicates that the economic recovery is continuing at a moderate pace, though somewhat more slowly than the Committee had expected. Also, recent labor market indicators have been weaker than anticipated. The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan.
http://jlne.ws/ikGW4h
Bernanke doesn't have 'precise read' on slowdown
By Steve Goldstein, MarketWatch
Federal Reserve Chairman Ben Bernanke, during his press conference, said the central bank didn't have a precise read on why the U.S. economy is slowing down but notes that it expects a pick-up by 2013. He also said a default by Greece could pose risks to the European and global financial system but he said U.S. banking exposure was "small." Money market funds, on the other hand, have "substantial" exposure to core European banks that could be impacted by the Greek situation. Bernanke also again lauded the idea of a formal inflation target, which he said could help anchor expectations, but he said nothing was imminent and pointed out that the central bank would need public, Congressional and White House "buy-in" before it proceeded
http://jlne.ws/khIvuY
QE2 Proves No Silver Bullet
By JON HILSENRATH, WSJ.com
Federal Reserve officials have been warning for months that the controversial $600 billion bond-buying program they initiated last year wouldn't be a panacea for an ailing U.S. economy. That's one forecast they seem to have gotten right.
http://jlne.ws/ka1S9F
A Look Inside the Fed’s Balance Sheet
WSJ.com
Ahead of the Federal Reserve‘s policy-setting meeting tomorrow and the coming end this month of QE2, it’s worth taking a look at the latest figures from the Fed’s balance sheet.
http://jlne.ws/mtIEYY
Parsing the Fed: How the Statement Changed
By Phil Izzo, WSJ.com
The Fed’s statement following the June meeting noted no change in policy, even as the central bank said that the recovery is moving more slowly than expected. The statement has a lot of discussion of inflation amid recent reports of rising prices, with the Fed noting numerous times that it expects inflation will remain subdued over the long run
http://jlne.ws/jZjxXB
Fed keeps rates on hold and says QE2 to end
MarketWatch
The Federal Reserve signaled concerns about economic growth Wednesday as the central bank kept its targeted Fed funds rate at a historic low between 0% and 0.25% and said it would end, as planned, its $600 billion bond purchase program in eight days.
http://jlne.ws/jxrB94
Who really benefited from QE2 anyway?
By Brett Arends, MarketWatch
The flood of cheap money has helped the big banks rake in profits hand over fist. (Last quarter, Goldman Sachs Group Inc. made trading profits every single day.) Commodity speculators have grown rich.
http://jlne.ws/ku9onw
Events
FIA Treasury & Rates Forum
September 14, 2011
FIA Program On Growing Role Of Treasury Futures - New York City
http://jlne.ws/fQFQXP
MarketsWiki Questions: Exploring Financial Technology - an interactive video series and event on October 6, 2011 in Chicago
Question 2 Now Available
Ahead of our MarketsWiki Questions: Exploring Financial Technology event in October we're asking experts in the financial services industry seven questions and providing the best answers in an interactive video format. Question 2: Where is money wasted, lost or inefficient in the transaction chain and how can technology fix it?
http://jlne.ws/kbEq3v
Economic News
May New Home Sales Slide 2.1% to 319,000 Annual Rate
By Patrick Temple-West, The Bond Buyer
New home sales fell 2.1% in May to a seasonally adjusted annual rate of 319,000, as the number of new homes for sale dropped to a record low, the Commerce Department reported Thursday.
http://jlne.ws/lhpgrO
May existing home sales fall to 6-month low
By Greg Robb, MarketWatch
Sales of existing single-family homes and condos fell 3.8% in May to a seasonally adjusted annual rate of 4.81 million, the National Association of
Realtors reported Tuesday.
http://jlne.ws/kK8XR9
Consumer Comfort Index Declines in U.S
By Shobhana Chandra, Bloomberg
Consumer confidence fell for the first time in five weeks as Americans grew more concerned about the economy.
http://jlne.ws/kOFWcV
Michigan Retail Sales Steady in May
Federal Reserve Bank of Chicago
“May was a virtual replay of April and sustained that month’s sales gains,” said James P. Hallan, MRA president and chief executive officer. “Sales remained steady and didn’t fall back to their March level. Retailers remain cautious about the economy and the lack of new jobs, but falling gasoline prices should help bolster consumer spending and retailers’ optimism.”
http://jlne.ws/jz16MB
FHFA House Price Index Rises 0.8 Percent in April; First Monthly Increase Since May 2010
U.S. house prices rose 0.8 percent on a seasonally adjusted basis from March to April, according to the Federal Housing Finance Agency’s monthly House Price Index. The previously reported 0.3 percent decrease in March was revised to a 0.4 percent decrease. For the 12 months ending in April, U.S. prices fell 5.7 percent. The U.S. index is 19.3 percent below its April 2007 peak and roughly the same as the January 2004 index level.
http://jlne.ws/jfwVH8
Mortgage Applications Fall 5.9% in Week
The Bond Buyer
Mortgage application volume dropped 5.9% in the week ended June 17, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey.
http://jlne.ws/mzRi70
Index of Consumer Sentiment slipped from 74.3 in May to 71.8 in June, but remains up from 69.8 in April
Federal Reserve Bank of Cleveland
According to the latest release from the University of Michigan, its Index of Consumer Sentiment slipped down from an index level of 74.3 in May to 71.8 in June, but remains up from 69.8 in April. Both the current conditions and expectations components decreased during the month. The current conditions component fell from 81.9 to 79.6 in June and is now below 80 for the first time since last October.
http://jlne.ws/j7AKEO
Payrolls shrink, jobless rates drop in many states
Reuters
The number of people on companies' payrolls shrank in more than half the U.S. states in May, even though the jobless rates in many places continued to improve, Labor Department data released on Friday showed.
http://jlne.ws/mRgB9L
Exchanges, Clearing Houses & MTFs
CME Wins Out Over ELX In Rate-Futures Spat
Dow Jones/Nasdaq
CME Group Inc. (CME) has been cleared by regulators of engaging in anti- competitive activity in the huge U.S. rate futures market after a rival alleged it was being stymied by the world's largest futures exchange operator.
http://jlne.ws/iCae11
NYSE BondMatch receives AMF approval
Press Release
Amsterdam, Brussels, Lisbon, London, Paris, Monday, 20 June 2011 - NYSE Euronext (NYX) today announced that NYSE BondMatch, its new Multilateral Trading Facility (MTF) designed to meet European user needs for transparency, liquidity and effective pre- and post-trade services on the euro-denominated bond market, received regulatory authorization and will begin trading on July 11, 2011.
http://jlne.ws/jW1d24
Firms & Banks
Fidelity Starts First Municipal-Bond Funds With Fixed End Dates
By Laura Keeley, Bloomberg
Fidelity Investments, the second- biggest U.S. mutual fund company, is starting four funds with defined liquidation dates that invest in municipal bonds, the first actively managed pools of this type.
http://jlne.ws/j2bQ1r
Goldman Sachs boosts corporate broking book
eFinancial News
Goldman Sachs, which on average earns more from its corporate broking clients than rival firms, has added two blue-chip companies in as many days to its UK roster.
http://jlne.ws/jdBl2h
UBS to cut almost 6 percent of tech staff
Reuters UK Focus via Yahoo! UK & Ireland Finance
UBS is to cut around 500 technical staff, a spokesman said on Wednesday, confirming a report in the Italian-language paper La Regione Ticino, as the Swiss bank seeks to reduce running costs.
http://jlne.ws/k6BdrU
UBS departure rumors raise questions about marketability of complex
Stamford Advocate
How do you market an office building with a cavernous open area the size of two football fields?
http://jlne.ws/mPtXuu
UBS names new head of US corporate access
Business Insider
Pellegrino is the new head of US corporate access for UBS, reporting to Matt Foulds, head of US sales for the bank's cash equities business. He says that makes him perhaps the only 'born-and-bred corporate access professional heading up a team right now.'
http://jlne.ws/jcp5JX
RBS directors awarded £1m shares bonus
The Scotsman
SEVEN executive directors of the Royal Bank of Scotland have been handed bonus shares worth more than £1 million under a reward scheme condemned by shareholder groups and unio
http://jlne.ws/kR2scB
HSBC appoints chief of business banking
Gulf Times
HSBC Bank Middle East has appointed Simon Burdett as chief of business banking in Qatar.
http://jlne.ws/a4zpTY
Citigroup fires starting gun on EMI auction
By Andrew Edgecliffe-Johnson, Citigroup
Citigroup has fired the starting gun on the auction of EMI, the British music business it seized from Guy Hands’ Terra Firma group in February, setting up a probable sale of the company behind the Beatles and the James Bond theme tune. The US bank is moving faster than many potential bidders predicted, hoping to take advantage of a stabilising US music market and strong interest from bidders in this spring’s auction of Warner Music, which Len Blavatnik’s Access Industries won in May with a $3.3bn offer.
http://jlne.ws/jqy5AT
Goldman's Salame Is Said to Plan Move to New York, Consider New Assignment
Bloomberg
Pablo J. Salame, one of Goldman Sachs Group Inc. (GS) 's four sales and trading chiefs, plans to move to New York from London this summer and may take a new assignment, according to three people familiar with the matter.
http://jlne.ws/k6zRo7
PNC Said to Pay $3.45 Billion for RBC U.S. Retail Banking Unit
BusinessWeek
PNC Financial Services Group Inc. has agreed to pay $3.45 billion in cash and stock for Royal Bank of Canada's U.S. retail banking unit, according to people with knowledge of the matter.
http://jlne.ws/mkL5WF
UBS Hires Citigroup's Brengel, Frauenhofer for Technology
BusinessWeek
UBS AG, Switzerland's biggest bank, hired Doug Brengel and Bill Frauenhofer from Citigroup Inc. to head its technology group in the latest exchange of executives between the two firms.
http://jlne.ws/kOH7ZF
High street banks under pressure to adopt Barclays' PPI approach
Guardian Unlimited
Barclays' PPI compensation offer should be followed by Lloyds, RBS and HSBC, says Which? chief executive Lloyds Banking Group, Royal Bank of Scotland and HSBC are coming under pressure to follow Barclays after it said this week that it will compensate customers who were mis-sold payment protection insurance thousands of (PPI) on a no-quibble basis. Barclays, which has set aside £1bn to cover the ...
http://jlne.ws/j00kvl
Deutsche Bank says SIFI fees about what expected
Market Watch
A capital surcharge that regulators plan to impose on banks deemed too-big-to-fail is "about what we expected," the Chief Executive of Germany's Deutsche Bank AG (DB) told Dow Jones Newswires Friday.
http://jlne.ws/jn0U4D
UBS hires 1,000 staff in Greater China
eFinancial News
UBS has hired more than 1,000 staff in Greater China for its investment bank in the past 18 months, including around 100 people to help produce local-language research in Mandarin.
http://jlne.ws/jdrXKM
Goldman Sachs banker teams up with ex-Asda chief on retail venture
eFinancial News
The departing head of retail investment banking at Goldman Sachs has teamed up with the former chief executive of Asda to launch a new vehicle that will buy small businesses in the retail sector, Financial News can reveal.
http://jlne.ws/jMxI1r
Regulators
IMF Global Financial Stability Report, GFSR Market Update - June 2011
Press Release
http://jlne.ws/lawaT2
FSA admits regulatory deficiency in RBS report
ShareCast
Lord Adair Turner, the chairman of the Financial Services Authority, has said at the watchdog's annual general meeting that a report concerning the failure of the Royal Bank of Scotland (RBS) will be released later this year.
http://jlne.ws/iUSqUy
How Long Can IMF Play the Contortionist?
By STEPHEN FIDLER, WSJ
So in the end, it looks like the International Monetary Fund will be the one to blink. Concessions by the Washington-based institution are expected to allow the release of the next E12 billion ($17 billion) slug of bailout funds for Greece before the government runs out of money next month. A Greek payments crisis thus would be avoided, at least for a month or two.
http://jlne.ws/lngU4a
U.K. Jabs EU on Bank Rules
By DAVID ENRICH And SARA SCHAEFER MUñOZ, WSJ
LONDON—British officials are waging an increasingly aggressive fight to impose banking regulations as they see fit, even if they go further than rules elsewhere in the European Union. British officials have publicly lashed out at European policy makers who are pushing proposals that would limit the U.K.'s ability to go beyond other countries when it comes to bank capital and liquidity requirements.
http://jlne.ws/mObcID
Regulators cite progress on global financial rules
Fox News
Federal regulators told members of Congress they are collaborating with other nations on rules intended to prevent another financial crisis.
http://jlne.ws/k8gct2
Tracey McDermott addresses FSA Financial Crime Conference
Press Release
FCA will pursue the objectives of keeping crooks out of finance, encouraging industry to strengthen its defences, and educating and warning consumers about the dangers they may face
Tracey McDermott, acting director of enforcement and financial crime at the Financial Services Authority (FSA), today highlighted the continuing importance of financial crime within the future UK regulatory landscape.
http://jlne.ws/jOethc
Global News
Irish economy returns to growth
By John Murray Brown, FT.com
The Irish economy returned to growth in the first quarter with Gross Domestic Product climbing 1.3 per cent as strong exports and profits from Irish-based multinationals made up for for flagging domestic demand.
http://jlne.ws/lcrpOb
Juncker offers chink of hope to Ireland
Hedge Analyst
A change in the terms of conditions in the EU ‘permanent bailout fund’ due to be launched in 2013 has been greeted with caution by economists but could be seen as a ‘lifeline’ by politicians
http://jlne.ws/kKYt47
Dismay as Greek reform grinds to halt
By Tony Barber and Kerin Hope in Athens, Financial Times
Greece’s international creditors have watched with increasing dismay this year as the economic and fiscal reform effort required of the socialist government to prevent the eurozone’s first sovereign debt default has ground to a halt. On Wednesday they were struck by bad news on a different front when Antonis Samaras, leader of the conservative opposition New Democracy party, defied their advice and announced he would oppose the government’s latest austerity plans when they come up next week for a parliamentary vote.
http://jlne.ws/lamHYP
As new German links surface, Taib denies Swiss bank account
Malaysia Chronicle
Battling a swathe of corruption charges, Sarawak Chief Minister Taib Mahmud has denied he has a bank account in Swizerland, but even before the dust can settle on the allegation raised by the Bruno Manser Fund, a fresh accusation has erupted with the Sarawak Report offering evidence of his dealings with Deutsche bank. In a rare admission and concession to the huge pressure piled on him to leave ...
http://jlne.ws/js6ish
Santander chief and family face tax probe
By Miles Johnson in Madrid, Financial Times
Emilio Botín, chairman of Banco Santander and one of Spain’s highest profile public figures, is being investigated by the country’s high court over allegations of tax-related offences alongside 11 other members of his powerful family.
http://jlne.ws/mnv9yz
Swiss upper house approves tough bank capital rules
Reuters UK Focus via Yahoo! UK & Ireland Finance
The Swiss upper house of parliament on Thursday backed a new law to force UBS and Credit Suisse (NYSEArca: CSMA - news) to hold more capital than global rules demand.
http://jlne.ws/ikN4z0
Spain's Bad Loans Hit 16-Year High
By DAVID ROMAN, WSJ
Spain's central bank Friday said bad debt at the country's commercial banks soared in April to the worst level in 16 years, a sign that a three-year property bust that's hit developers and households is hurting the financial sector even as Spanish economic growth recovers modestly.
http://jlne.ws/kl2Lt2
Clegg calls for RBS and Lloyds giveaway
By Elizabeth Rigby in Rio de Janeiro and Patrick Jenkins in London, Financial Times
Nick Clegg wants to give every British voter shares in the state-owned banks as the deputy prime minister looks to revive his battered image by creating a “people’s banking system”.
http://jlne.ws/iesFeU
Barings: UK inflation expectations wane and unemployment falls
The latest outlook for UK inflation was encouraging. The quarterly survey of inflation expectations from the Bank of England showed that although, on average, respondents expect medium-term inflation to be well above the UK central bank’s 2.0% target, the margin above target is likely to be smaller than had been expected in February.
http://jlne.ws/mcnhom
India set to open up retail banking
By James Fontanella-Khan in Mumbai, Financial Times
Indian industrial conglomerates, including Reliance Group and Mahindra & Mahindra, are set to be given access to the country’s lucrative retail banking sector after policymakers decided to drop years of opposition.
http://jlne.ws/kQBKgU
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